U.S. Allies Feel Strain of Trump’s Friendship

(Bloomberg) --

U.K. Prime Minister Boris Johnson’s new government is finding that President Donald Trump’s friendship tends to come at a price, even for the strongest of U.S. allies.

Two U.S. officials told Bloomberg yesterday that Washington was gravely disappointed by a court decision in the autonomous U.K. territory Gibraltar ordering the release of the Iranian oil tanker Grace 1.

The U.S. is trying to get the decision reversed and has threatened penalties against any entity that does business with the tanker, which was seized by British commandos on July 4. Gibraltar officials say it was en route with oil to Syria in breach of European Union sanctions. 

The stakes for Britain are high. Iran still holds a British-flagged tanker and has hinted it may release it if the Grace 1 goes free.

And Johnson, who has pledged to take the U.K. out of the EU on Oct. 31, badly needs U.S. support for a post-Brexit trade deal.

Trump is increasingly putting pressure on allies on issues ranging from Iran to rejecting cooperation with Chinese technology companies such as Huawei to urging Israel to ban the visit of U.S. lawmakers.

That risks creating a tangle of smaller disputes and undermining broader global interests such as security and trade.

Global Headlines

Reversing course | Israel announced it will allow Rashida Tlaib to visit her family on a humanitarian trip, a day after it said Tlaib and fellow Muslim U.S. Congresswoman Ilhan Omar would be barred from an official visit this weekend because of their support for a boycott of the country. The travel ban was announced shortly after Trump tweeted that the two Democrats — whom he has targeted in recent weeks — “hate Israel & all Jewish people.”

Counterpoint | Omar and Dean Phillips are freshman U.S. House Democrats representing districts in Minnesota’s Twin Cities region, but that’s where the similarities end. Phillips is urging some party lawmakers — including Omar and other members of “the squad” of newly-elected progressive women — to slow down on calls to impeach Trump, stop sniping on Twitter and cut some deals with Republicans. He told Erik Wasson he didn’t get to Congress by being a “rabble-rouser.”

In limbo | Voters in Argentina face at least 10 more weeks of uncertainty to see if the market meltdown in the wake of Sunday's primary had any basis in reality. Campaigning is under way for the first round of the presidential elections on Oct. 27, and few believe incumbent Mauricio Macri or Alberto Fernandez — who led strongly in the primary — will work together to allay the risk of more turmoil. The upshot is no immediate end in sight to Argentina’s parlous economic and financial situation.

Rescue plan | Facing crippling power cuts and severe food shortages, Finance Minister Mthuli Ncube has a plan to end Zimbabwe's two-decade stand-off with international creditors in a bid to halt economic collapse. The Cambridge-educated Ncube outlined in an interview ambitious proposals to sell bonds, privatize state companies, and settle its debt.

Amazon dispute | Brazil’s president rebuffed European criticism of his environmental policies after Norway and Germany froze millions of dollars in financial aid to an Amazon rainforest preservation fund. Jair Bolsonaro accused the global elite of indifference to deforestation, arguing that their interest is motivated by the natural riches of the region, and said Germany should understand that Brazil is under new management.

What to Watch

• Hong Kong's protesters will stage new demonstrations this weekend amid growing concern that China will send in troops after state media showed video footage of paramilitary police massing just across the mainland border. The head of Cathay Pacific Airways Ltd., the most visible corporate victim of the protest, also resigned.
• Prime Minister Narendra Modi’s decision to scrap Kashmir’s autonomy after imposing an unprecedented communications lockdown is set to be tested today at the United Nations Security Council after India’s top court deferred a case calling on the government to lift restrictions in place for 12 days.
• Estonia's prime minister rebuked his nationalist coalition partner after its botched attempt to oust the head of police intensified a dispute that has pushed the squabbling government to the brink of collapse.

And finally ... Ever the property developer, Trump may have his eye on his biggest possible acquisition yet: Greenland. According to the Wall Street Journal, the president wants to buy the ice-covered north Atlantic island. Denmark, which owns it, isn’t sure whether the offer is a joke, and isn't selling in any case. But the idea is being taken seriously in some corners in the U.S., which has built several military bases on the world’s largest island, and it will be in focus when Trump makes his first formal visit to Denmark next month.

--With assistance from Kathleen Hunter.

To contact the editor responsible for this story: Karl Maier at kmaier2@bloomberg.net, Rosalind MathiesonMichael Winfrey

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